Wednesday, July 15, 2009

Samuelson on deficits

In the Washington Post, Robert Samuelson reminds us about the problems of big government:
Everyone favors benefits and opposes burdens (taxes). Republicans want to cut taxes without cutting spending. Democrats want to increase spending without increasing taxes, except on the rich. The differences between the parties are shades of gray. Hardly anyone asks the hard questions of who doesn't need benefits, which programs are expendable and what taxes might cover remaining deficits.
The CBO notes that elevated deficits would penalize saving, investment and income, while unprecedented tax burdens could "slow the growth of the economy, making the [government's] spending burden harder to bear." To such warnings, Americans' collective response is: Go away.
There is nothing new in what he writes. However, not enough people realize that eventually someone will end up losing in this gigantic Ponzi scheme that we are all running. Governments have finite lifetimes, but they budget on the assumption that they are immortal.

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